Upper Tribunal Tax and Chancery Chamber

UT (Tax & Chancery) UT-2022-000134 UT-2022-000135 UT-2022-000137 - [2025] UKUT 00214 (TCC)

Fecha: 31-Ene-2025

Lone Large Orders

Lone Large Orders

722.

The Tribunal has found that:

(1)

Mr Urra placed 15, Mr Lopez placed five and Mr Sheth placed 14 Lone Large Orders.

(2)

There is nothing to distinguish the Lone Large Orders from the Large Orders in the Instance Pool, save for the fact that there was no small order on the opposite side of the order book.

723.

The Traders submitted that these Lone Large Orders are a real problem for the Authority – they are a meaningful number and the Authority has not put forward any explanation for them. They are, they submitted, entirely consistent with the Trading Strategies as put forward by the Traders and demonstrate that, whatever the Traders were hoping to achieve by placing the Large Orders, it cannot have been to abusively facilitate the execution of the Small Orders.

724.

The Authority’s position was:

(1)

The Lone Large Orders represent a very small proportion of the Traders’ large orders, and may be even smaller than identified by Mr Creaturo given that there were examples where the Lone Large Orders appear to have missed overlapping with a Small Order by milliseconds.

(2)

The Authority’s case is not that every single time that the Traders placed a large order they were intending to facilitate the execution of a small order. It was not Mr Creaturo’s job to provide an explanation for these orders; this was not what the experts had been instructed to do. Mr Creaturo’s view was that, although he could not explain why the Lone Large Orders were placed, they were not explained by the Traders’ Trading Strategies, because he did not accept that the Traders’ alleged strategies were plausible explanations for any of the large orders.

(3)

The evidence put forward by the Traders as to the placement of these Lone Large Orders was subject to the same flaws identified in respect of the evidence in relation to their Large Orders in the Instance Pool.

725.

The Tribunal considers that it is accurate to describe the number of the Lone Large Orders as being a small proportion of the total number of large orders placed by the Traders in the Relevant Period. However, the numbers are not insignificant, and their existence does rather beg the question as to why they were placed. This is a question that the Authority is not required to answer, as it has not pleaded that they were abusive, but as the Traders submit that all large orders they placed were in pursuit of their Trading Strategy we have considered the further explanations which have been provided.

726.

The Traders submitted that they placed all of their large orders in pursuit of their Trading Strategy (ie the Large Orders within the Instance Pool and the Non-Instance large orders which included the Lone Large Orders).

727.

Mr Urra did not provide further evidence in his witness statement as to his placement of these 15 Lone Large Orders. Mr George did rely on the fact of their existence.

728.

Mr Lopez and Mr Sheth did both give evidence in relation to particular Lone Large Orders they had placed in their witness statements on which they were cross-examined. The Authority submitted that, even for these, the Traders have not offered a plausible explanation.